Standard deviation of the damage, Econometrics

Assignment Help:

In a year, weather can impose storm damage to a home. From year to year the damage is random. Let Y be the dollar value of damage in a given year. Assume that 95% of the year's Y=$1,000, and 5% of the years, Y=$15,000.

a. Calculate the mean and standard deviation of the damage in any year.

b. Consider an 'insurance pool' of 100 sufficiently dispersed homes, which implies the damage to dissimilar homes can be viewed as separately distributed as random variables. If ? is the average damage to those 100 homes in a year, (i) what is the expected value of the average damage? (ii) What is the probability that ? exceeds $2000?

 


Related Discussions:- Standard deviation of the damage

Portfolio maximization , Derive marginal benefit of reducing principal bala...

Derive marginal benefit of reducing principal balances

Exam prep, Females, it is said, make 70 cents to the dollar in the United S...

Females, it is said, make 70 cents to the dollar in the United States. To investigate this phenomenon, you collect data on weekly earnings from 1,744 individuals, 850 females and

Firm''s marginal revenue function, A firm has the following inverse demand ...

A firm has the following inverse demand function:       where Q  is Quantity and P  is Price   (a) Find the firm's marginal revenue function. (b) Find the level of out

Q1, how to find the relationship for a simple linear model?

how to find the relationship for a simple linear model?

Explain cournot and collusion curve , For each pair of terms/concepts, defi...

For each pair of terms/concepts, define each term/concept and explain the relationship between them. The ideal answer is three sentences. One for each definition and one for the re

Future economic growth, What trends do you see in the Economic, Political, ...

What trends do you see in the Economic, Political, and Cultural environment of society that will affect the industry in the future? Answer) The trends that will affect the indus

Detonation equation for this mixture, 1. Consider a mixture of one mole of ...

1. Consider a mixture of one mole of Nitroglycerin and one mole of Ammonium Nitrate a. Write the detonation equation for this mixture b. Using class notes, posted articles in

Calculate the elasticity of the premium, You are a property insurer and one...

You are a property insurer and one of your potential clients, whose current wealth is $450,000, wants to insure her $250,000 house.  The chances of the house burning down in any gi

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd